A potential fire sale at Disney is underway, as the company is looking to sell off some major assets to offset huge losses it has experienced.
The COVID-19 pandemic dealt Disney a huge blow, as visitation to its parks went down, as did revenue from movies and other entertainment the company produces. The leadership of the organization came into question as well, especially revolving around the company getting into social and political squabbles with Florida Governor Ron DeSantis.
Disney fired its CEO Bob Chapek in November of 2021, appointing Bob Iger, who was his predecessor, to serve in the role once again. While Iger was supposed to revitalize the company once again, the financial situation hasn’t improved much.
The Wall Street Journal reported recently that in the eight months since Iger has returned to the role of CEO, he’s been “having a hard time.”
It’s not just one area of the company that has been hit hard, either. Its major movie films, streaming platform services and amusement parks have all struggled mightily from a financial perspective recently. One financial analyst has estimated that it’s possible for the company to lose about $1 billion between June of 2022 and June of 2023.
As a result, Iger is reportedly looking to sell off some assets that Disney has to recoup those losses.
In February, Iger said it was “time for another transformation” at Disney, as he announced the company would be cutting 7,000 jobs and also reducing costs by $5.5 billion.
More recently, Iger sat down with CNBC to provide some more insight into that transformation. He said:
“The transformative work of course is making sure that our cost structure reflects the economic realities of the business.”
Part of this includes “dealing with businesses that are no-growth businesses and what to do about them.”
Iger was asked directly whether that might include selling some of the company’s assets in linear television – such as FX, ABC and National Geographic – and he responded the company would be “open-minded and objective about the future of those businesses.”
One asset that’s seemingly not in Disney’s core that Iger apparently isn’t willing to consider selling is ESPN, a sports media empire. As he said:
“If you look at today’s media landscape, sports stands very, very tall in terms of its ability to convene millions and millions of people all at once. It’s an advertiser’s dream. It’s a great demographic.
“It lends itself to technology in many ways, both in terms of coverage, distribution and consumption. And our position in that business is very unique. We have a great brand. We’ve had a great business. And we want to stay in that business.”
He did add that Disney would be “looking for strategic partners” with ESPN that could help them with content, distribution or other aspects to make the operation more efficient and, as a result, profitable.
CBS News reported recently that Disney is confident in Iger’s ability to turn the company around and wants him to see the plan through. They extended his contract for two more years, meaning he’ll be CEO of the company through at least the end of 2026.